Four Corporate Power-Grabs That Got the Thumbs Up from Federal Courts
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Arbritration agreements are increasingly common whenever a consumer signs a contract for services including telecommunications, consumer banking and credit, student loans, consumer electronics, nursing homes, home building, gift cards, e-commerce, investment advisors and brokers and employment agreements. They do not affect a customer who buys something over-the-counter and the product is defective or causes an injury.
“You have really diverse examples of this kind of corporate domination,” said Christine Heinz, an attorney for Public Citizen, pointing to the dozens of well-known corporations that insist consumers sign arbitration clauses. “It is a form of tort reform. It’s a corporation’s way of getting around Congress [which has not capped court-awarded damage awards] and the Supreme Court has rubber-stamped it.”
According to Ferguson, these agreements also are increasingly common in business-to-business contracts in manufacturing, where they are used not only to pressure firms with low-wage workers to meet untenable production quotas but also to keep workplace abuses out of court and away from regulators. “It’s a business model,” he said.
According to a new report from the Pew Safe Checking In the Electronic Age Project, two-thirds of the county’s 100 largest banks require arbritration agreements. “Of the 92 account agreements Pew was able to obtain, 64 percent restricted dispute resolutions in one or more of the following ways: mandatory arbitration, class action bans, jury trial waivers, restrictions on damages, and shortened statutes of limitation,” Pew said.
“A checking account is the most widely used financial product in the United States, and many bank customers become bound by a mandatory arbitration agreement when they open their account,” said Susan Weinstock, project director. “Consumers were not aware that their right to go to court is often limited if they have a dispute with their bank.”
4. Patent Rulings Also Extending Corporate Clout
For generations, the U.S. patent system has been used to protect an inventor’s ideas and encourage innovation. While legal fights over who-invented-what are nothing new, the emergence of patents on biotech products are creating a collision between long-held indvidual rights and newly created intellectual property or its byproducts.
One of the most egregious cases involving “ patent bullies,” as Daniel B. Ravicher of the Public Patent Foundation put it, is Monsanto suing farmers whose fields have become contaminated from seeds Monsanto has sold to other farmers. In early 2012, a federal district court judge dismissed a suit brought by a consortium of organic farmers in response to Monsanto suing farmers for non-licensed use of its seeds. The farmers wanted to invalidate Monsanto’s patents. The company claims that it only sues farmers who replant its seeds without paying for them on an annual basis.
This November, the U.S. Department of Agriculture told farmers to buy insurance if they didn’t want to get sued by Monsanto. The lawsuit is headed to a federal appeals court in Washington in January, but highlights the tension between property rights tied to one’s land and corporate intellectual property privileges created by the patent system.
The Monsanto case is not alone in challenging the “ closed universe” of corporate patent law. In September, the American Civil Liberties Union, together with the Public Patent Foundation, petitioned the U.S. Supreme Court to review a case that sought to invalidate patents awarded to a biotech company, Myriad Genetics, Inc., which gave it exclusive rights to control medical testing tied to two human genes that can be used to detect breast and ovarian cancer.
The ACLU said the patents allow Myriad to control the cost of medical tests and prevent women from getting second medical opinions about test results. Other researchers are blocked from even studying these genes, said the ACLU, which sued on behalf of several doctors, researchers and women’s healthcare advocates. The first question the ACLU asked the Supreme Court was, “Are human genes patentable?” (On Friday, the Supreme Court announced it would hear the case.)